TAX • Read Time: 4 min
Does Your Child Need to File an Income Tax Return?
As parents, we encourage our children to work, so they can learn important values about work and independence. At what point, if at all, do children need to file an income tax return for the money they earn?
The IRS does not exempt anyone from the requirement to file a tax return based on age, even if your child is declared as a dependent on your tax return.1
Your dependent children must file a tax return when they earn above a certain amount of income.
Dependent children with earned income in excess of $12,400 must file an income tax return. Dependent children with unearned income of more than $1,100 must also file a return. And if the dependent child's earned and unearned income together total more than the larger of $1,100, or a total earned income up to $12,050 plus $350.2
These thresholds are subject to change, so please consult a professional with tax expertise regarding your individual situation.
Here's an example. Kyle is a 20 year old college student who's claimed as a dependent by his parents. He received $400 in unearned income and $5,500 for a part-time job on campus. He does not have to file a tax return because both his unearned and earned income fall below the thresholds. Kyle's total income of $5,900 is less than his total earned income plus $350.
Even if your child earns less than the threshold amount, filing a tax return may be worthwhile if your child is eligible for a tax refund.
If you decide to prepare a separate return for your child, the same reduced standard deduction rules detailed above will apply.
1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
2. IRS.gov, 2021
The content is developed from sources believed to be providing accurate information.The information in the material in not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information, should not be considered a solicitation for the purchase or sale of any security.
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Millions faithfully file their 1040 forms each April. But some things about federal income taxes may surprise you.
A quick look at how federal income taxes work.
Use this calculator to estimate your income tax liability along with average and marginal tax rates.